At least 10 Indians ready applications on Google’s Play Store, which have been downloaded millions of times, broke Google’s rules on loan repayment terms designed to protect vulnerable borrowers, according to a Reuters review of these services and more than a dozen users.

Four applications have been removed from Play at the store – where the vast majority of Indians download a phone applications – after Reuters reported to Google that they were violating its ban on offering personal loans requiring full repayment in 60 days or less.

Three of these applications – 10MinuteLoan, Ex-Money and Extra Mudra – did not return calls and emails seeking comment.

The fourth application, StuCred, was allowed to revert to the Google Play Store on January 7 after removing the 30-day loan offer. He denied engaging in unscrupulous practices.

At least six more applications remain available at stores that offer loan repayment terms, or durations, sometimes as low as seven days, according to 15 borrowers and screenshots of the loan details of the six applications shared with Reuters.

Some of them applications apply high processing fees of up to Rs. 2,000 on loans of less than Rs. 10,000 with terms of 30 days or less, depending on the 15 borrowers. Along with other fees, including one-time registration fees, borrowers can pay, in real terms, interest rates of up to 60% per week, depending on their loan details.

In comparison, Indian banks typically offer personal loans with annual interest rates of 10-20%, and they usually don’t have to be fully repaid for at least a year.

The Reserve Bank of India (RBI), the banking regulator, did not respond to a request for comment on its intention to strengthen supervisory measures. In December, he published a public notice regarding ready applications, warning some engaged in “unscrupulous activities”, such as imposing excessive interest rates and fees.

Google, which dominates the Indian app market with over 98% of smartphones using its Android platform, said its policies were “continually updated in response to new and emerging threats and bad actors.”

“We act on applications that are reported to us by users and regulators, ”he added.

Contacted by Reuters on applications offering short-term warrants denied wrongdoing or did not respond.

The applications, many of whom act as intermediaries connecting borrowers and ready institutions, do not break the law because the RBI does not have rules regarding minimum loan terms. The RBI also does not oversee intermediaries.

India’s Ministry of Finance and Ministry of Information Technology did not respond to requests for comment on their intention to intensify the review of these applications.

Some consumer activists argue that short-term or payday loans can cause borrowers to default on payments and increase costs.

“Predatory loan applications with high processing fees, short terms and high default penalties lead people into a debt trap, ”said Pravin Kalaiselvan, who heads a digital rights group, Save Them India Foundation.

Google introduced its own global policy for its platform in 2019 “to protect users from harmful or deceptive practices.”

The rise of smartphones and affordable mobile internet in India has resulted in a proliferation of hundreds of ready applications in recent years. Campaign groups say rapid technological advances have overtaken the authorities and are calling for the introduction of regulations regarding loan terms and fees.

“There are no clear standards on ready applications in India. Right now they’re falling into a gray area, ”said Nikhil Pahwa, digital rights activist and editor-in-chief of MediaNama, a Delhi-based publication on technology policy.

“Decided unilaterally”

The fourth applications violating Google’s repayment term policy – 10MinuteLoan, Ex-Money, StuCred, and Extra Mudra – were advertising 30-day loan terms on their applications and had been downloaded at least 1.5 million times.

Reuters reported these applications to Google on December 18 and they were removed from the Play Store in India within four days.

Responding to a request from Reuters on whether it had offered loans requiring full repayment in 60 days or less, StuCred said: “Google has unilaterally decided that fintech applications can’t be on their applications store with refunds of less than 30 days, although no related law has been passed that would require such action from them (Google).

Several others applications say on their Play Store listings that the minimum repayment term they offer is over three months, but in reality their terms often vary between seven and 15 days, depending on the 15 borrowers and their screenshots.

Those applications include CashBean, Moneed, iCredit, CashKey, RupeeFly, and RupeePlus, which have been downloaded almost 12 million times in total.

Moneed said he follows RBI rules and any company that doesn’t should be allowed to do business. Responding to a request from Reuters on whether he had offered any loans requiring full repayment in 60 days or less, he said: “We support 90-day repayment for the loan cycle.”

CashBean also said it was following RBI guidelines. “Our customer service lines are open to all of our borrowers at all times,” he added. He did not directly answer the question of whether he offered loan terms of 60 days or less.

CashKey, iCredit, RupeeFly and RupeePlus did not respond to emails seeking comment and were not reachable by phone.

Harassment investigations

The ready the app industry has separately attracted the attention of the police who say they are investigating dozens of applications following the suicide of at least two borrowers in the past month after they and their families were allegedly harassed by debt collectors.

Police did not disclose the identity of those under investigation.

Harassment for debt collection is prohibited by RBI rules which state that debt collectors cannot harass borrowers by “persistently disturbing” them, or by contacting family or acquaintances.

The Reuters 50 Popular Review ready applications available on Google Play revealed that almost all of them require borrowers to give them permission to access their phone contacts.

Mahesh Dommati, a 28-year-old technician in Hyderabad who lost his job during the COVID-19[female[feminine foreclosure, was unable to repay the Rs. 6,000 loans he had taken out from an app called Slice. He said recovery agents used his contact list to repeatedly call family and friends, demanding that they pay on his behalf.

Slice said he follows RBI rules and does not engage in harassment.

© Thomson Reuters 2020

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(Except for the title, this story was not edited by NDTV staff and is published from a press release)

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